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Sunday, February 27, 2011

The Angel List Controversy, Fred's Marketing Controversy

Image by Lachlan Hardy via FlickrThere are two major controversies raging in the blogosphere right now. One is to do with The Angel List. The other is to do with our own Fred Wilson's blog post about marketing. Fred has started a s_itstorm by suggesting the best tech startups don't need marketing budgets. In fact, that is how he spots a great tech startup when he sees one.

The Angel List controversy I am sanguine about. I don't see two sides to the argument. There are many ways to invest. The Angel List is just one of them. Efforts like The Angel List have surely democratized the investment climate for the early stage startups. But there are old school holdouts with proven track records who think the process at The Angel List is too diluted. You can't really find nuggets of gold there.

I have said before that I don't expect an iconic company like Google, Facebook to emerge out of Y Combinator. But Y Combinator has been a great entrance to the scene. The majority of startups are not going to go IPO. And Y Combinator works great for such middling efforts.

Google, Facebook, Twitter, FourSquare, FoodSpotting - you don't see them in Super Bowl commercials. For them it has been all word of mouth. But I think that is still marketing. The product is so compelling that people who use it pass on the word. Fred thinks that is not marketing, that is the product being compelling. That is my agreement/disagreement with Fred on this hot marketing topic. Even Seth Godin dropped by Fred's blog to chime in.

Andy, by the way, FoodSpotting is an Angel List company. So never say never.